This R21 exploratory proposal uses an integrated, target-oriented approach in the rational development of BACE2 inhibitors - chemical tools that can be used to explore the basic biology of BACE2 and improve the selectivity of presently discovered active BACE1 inhibitors that are currently being developed as medications for Alzheimer's disease. There exists a broad consensus in the AD research community that the key to successful treatment of AD lies in the specific inhibition of BACE1. BACE1 is crucial for release of the amyloidogenic fragments that later form the extracellular neuritic amyloid plaques - one of factors in the pathogenesis of AD. Most of the known BACE1 inhibitors are relatively non-selective and target other aspartic proteases including the highly homologous BACE2. It has been shown that BACE2 may serve as an alternative alpha-secretase, another crucial enzyme that plays an important role in degradation of the amyloid precursor protein (APR), inhibition of which is highly undesirable. To better understand the role of BACE2 in human physiology and APP processing, we believe that selective inhibitors of this enzyme are needed as research tools. We hypothesize that it should be possible to design and synthesize inhibitors for BACE2 using an integrated multidisciplinary approach based on the combination of the computer-aided drug design, medicinal chemistry, and biology. Those compounds demonstrating BACE2 activity in the low nanomolar range will be screened at the whole cell level for their ability to alter APP processing. This iterative process is expected to yield several low nanomolar, lead- or drug-like selective inhibitors of BACE2. To achieve this goal, our specific aims are as follow: (1) Identify lead- and drug-like low molecular weight selective inhibitors of BACE2 using computer-aided drug design including de novo/rational drug design, virtual focused combinatorial library (vFCL) generation, and in silico screening of vFCL. To synthesize the best candidates from the de novo/rational design and vFCL approaches; (2) Assay candidate ligands for their inhibition of BACE1 and BACE2 in isolated enzyme assays. Potent, selective BACE2 inhibitors will be used for further optimization of ligand activity and selectivity through iterative molecular modeling, chemical synthesis, and biological tests; (3) For the best ligands, explore their effects on APP processing in cell-based assays. Prioritize inhibitors on the basis of activity, cytotoxicity, and resultant selectivity indices. [unreadable] [unreadable]